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We Should Keep This Part of Obamacare

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Even if you hate Obamacare because you think the government shouldn't be subsidizing health care, or because you don't want the government requiring you to carry health insurance, it's hard to argue that one aspect of the law is ultimately good for everyone. According to the Congressional Budget Office, Obamacare will result in the equivalent of 2.5 million fewer people working full-time jobs by 2024.

That's good?
Notice I said "fewer people working." They'll actually be choosing not to work because their health insurance is no longer tied to their ability to be employed full time.

I call that freedom.

How many people could have retired early, but worked until they're 65 just to keep their medical insurance until they could qualify for Medicare? Now, those people could work part time, or not at all, and buy insurance from the exchanges.

How many self-employed people have spouses that work solely so their family can have medical insurance? They could stay home with the kids, or join the family business, and buy insurance from the exchanges.

Ultimately, those people choosing not to work is good for the rest of us, because there are fewer people competing for the same jobs, giving workers bargaining power.

In addition to those who will stop working, people will be able to start new companies without having to worry about health insurance. Now, founders can leave their job and just get insurance from the exchanges. And they can attract top talent without having to figure out a way to get coverage for their small businesses, which typically have higher costs than larger businesses, because employees can get their insurance on the exchanges, as well

Like I said, freedom.

Tied to the mandate...
Unfortunately we can't just uncouple the insurance from employment. The two are intimately tied together because, when it comes to insurance, there's power in numbers; sick people with preexisting conditions are countered by the large number of relatively well people who are unlikely to generate as much health-care expenses as they pay in premiums. Essentially, by offering health insurance to all full-time employees, employers are actually creating a mandate, which keeps the cost down.

Before Obamacare, people who didn't have insurance through their employers were able to get individual insurance plans, but only if they didn't have preexisting conditions. If health insurers, such as UnitedHealth Group (NYSE: UNH  ) , Aetna (NYSE: AET  ) , and WellPoint (NYSE: ANTM  ) , had allowed people with preexisting conditions, they'd overwhelm the insurance pool, driving up costs. This would discourage the well people from getting insurance.

Now, United Health, Aetna, WellPoint, and the rest of the insurers are required to take everyone, which decouples health care from employment. Costs are kept down because the mandate requires the healthy people to carry insurance, too.

...which is tied to the subsidies
Unfortunately, we can't just have the mandate because there's a large number of people who can't afford health insurance. The only way to get them into the system is to have the government subsidize their health insurance.

In theory, new taxes and cost savings generated by the law will cover the subsidies, but there's a lot of moving parts that can throw those calculations out of whack. But less people choosing not to work isn't one of them.

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Read/Post Comments (17) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 24, 2014, at 8:06 PM, Jerry44 wrote:

    If you look at the reason healthcare was tied to employment in the first place, look to an intended consequence of government intervention in the market place. During WWll the government established wage and price controls, since employers could not offer raises to lure or keep employees they started offering perks such as healthcare. I am all for separating employers from health insurance, as long as that does not lead to more subsidies. Subsidy is another word for "on the dole" and we have way too much of that already.

  • Report this Comment On February 24, 2014, at 8:14 PM, erini wrote:

    Well, for the first time I read something in support of European idea that separates health insurance from employment. It is a high time to catch up with the Europeans. Americans should be ashamed to live in Dark ages where a health insurance is involved.

  • Report this Comment On February 24, 2014, at 8:24 PM, MaxxTheKatt wrote:

    Yes! For sure we want less people working. We already have several million people not working. But that may not be enough huh? We need a whole more people not working. Thats how you destroy a nation economy. By not working!

  • Report this Comment On February 24, 2014, at 8:41 PM, busseja wrote:

    Before Obamacare Medical insurance was decoupled from the employer. One could go on line and just buy it. It was cheaper and because of the wide variety one could select the plan that made sense for them.

    Sure is funny the fool wants more unemployment so people can get jobs. Just think, if we tripled all the wages, how many people would quit because the working spouse makes enough. Sounds a bit like a foolish thought to me. Do you really think people are going to work to pay someone else's health care insurance thru taxes and fees when they won't do it for themselves? Wow Profound. Lets all quit, think of the job openings then and we'd all get free healthcare paid for by Obama tree. You know, the one money grows on.

  • Report this Comment On February 24, 2014, at 9:22 PM, jbravo212 wrote:

    So, The Motley Fool is a HUGE FAN of GMO's (judging from previous stories FOOL has published), The FOOL is SUPPORTING Americans quitting their jobs and having the Government support them???? I am not sure I have EVER seen a entity cave into and drop to their knees as quick as THIS!!

  • Report this Comment On February 24, 2014, at 10:15 PM, KevinL123 wrote:

    This article is just plain stupid. Go drink some more Kool-Aid

  • Report this Comment On February 25, 2014, at 12:58 AM, mediaidiocy wrote:

    If "Obamacare" is about mandated health insurance, then why does Motley Fool (which has nothing to do with health insurance) continue to belt out one opinion after another?

  • Report this Comment On February 25, 2014, at 1:22 AM, Robier wrote:


    The motley fool is now into propaganda. I know Brian O'rrelli is well aware of the CBO's primary reason for the 2.5 million people choosing not to work was because if they boost their income they would lose the subsidy or free insurance. encouraging people to stay poor is very unfortunate policy.

    Their hasn't been a decoupling of insurance with the employer hence the fine on employers for not providing an approved level of insurance. Employers who will dump their employees on the exchange are doing it because Obamacare is driving their insurance cost up and it will save them money by not providing insurance.

    The CBO refused to estimate the loss of jobs related to employers cutting back because the employer mandate hasn't kicked in yet. There will definitely be a loss of jobs because employers will choose to stay below the 50 employee limit as well as making do with part time workers instead of full time workers. I will look foreword to reading the future article by Mr. Orrelli to see how he spins those job losses.

  • Report this Comment On February 25, 2014, at 1:25 AM, Rosa1 wrote:

    It is ridiculous to think that Obamacare will be good for people to work less and have "freedom" That is just bunk. I can not afford to work less. Neither can anyone else. This is just propaganda for us to accept this mess of a law "tax"

  • Report this Comment On February 25, 2014, at 4:13 AM, kissmybrain wrote:

    Health care has never been exclusively tied to employment. Difference is YOU HAD TO PAY FOR IT YOURSELF! It wasn't Free. Some parts of Obamacare are good by at the same time they are also expensive for everyone. In order to get that you had to EARN money and PAY for it ,health insurance was not just given to you for free so you could be lazy. At this time in history this country cannot afford this policy. We must first control our runaway government spending and high unemployment and low participation rates. Yes the White House is still touting how the unemployment rate is coming down. Well it is not the entire story. The White House must also tie that to the total labor participation rate. Only then do you get the true picture of how our country is doing. When you do that you see we not in a recession we are actually in a depression with so low of an employment rate vs participation rate we might as well be back in the 30's when politicians weren't as capable of lying as well as today. Back then Reporters actually reported and didn't do glam jobs like this article.

  • Report this Comment On February 25, 2014, at 7:25 AM, ed001 wrote:

    This is a sad commentary on the level of political propaganda that a company like The Motley Fool would have published under their name. Satirical? Educate? Amuse? Enrich? Sadly, this article is not any of the these. I would hope the journalistic writing quality and substance improves.

  • Report this Comment On February 25, 2014, at 8:16 AM, dusty10x wrote:

    Who retiring early from a well paying full time job could find a higher paying part time job? It makes no sense.....Writing articles claiming 2.5 million people losing jobs is somehow a good thing is really vile propaganda.......

  • Report this Comment On February 25, 2014, at 8:35 AM, Knick wrote:

    The Motley Fool has always been about propaganda! It's called making money in America! Forget Motley Fool ignore them. Has anyone not noticed that Americans are forced to have liability automobile insurance? If they can force automobile insurance on people they can force health insurance on people. Both of these coverage are good when you need them. If not for forcing auto insurance think of the people who could just crash your car and walk away. May also be good way to rid our country of illegal immigrants. Immigration was a thing of the past. We can't constantly do the same thing over and over and over! We formed a country now we need to move on. The immigrants need to stay in their own countries. So much crap going on in America it is shameful. Crooked congress passing a law so they can use campaign funds for personal use. The FDA making laws that prevents the general public from suing when they get hurt. This new rule came when FDA started getting paid big bucks to pass off dangerous drugs/devices on the general public. Pass them off and prevent the company that bought them off from getting sued. Really? Is this America? Not anymore. Fast becoming Babylong, North Korea, Iran, Iraq. FAST. Too late to prevent it. We snoozed too long.

  • Report this Comment On February 25, 2014, at 8:39 AM, Knick wrote:

    Will Americans ever stand up to the government and the wealthy as in Egypt, Ukraine and many other countries who have stormed their government and the wealthy and took back their country. Will we ever take back our country?????? The wealthy and our government simply handed our country off to China and Americans did nothing to stop them. Granted they were sneaky about it but it is not too late to force big corporate out of America.

  • Report this Comment On February 25, 2014, at 9:47 AM, RLMerrell wrote:

    It's not freedom, it's mooching.

  • Report this Comment On February 25, 2014, at 10:56 AM, srlouis wrote:

    Obama Care is a classic example of special interest groups influencing a good idea and ruining it. Some small changes to medical care in the country would have solved the problems plaguing health care but the gargantuan bureaucracy created by Obama Care did nothing more than mask the issues and shift the costs to future generations. The spin doctors are busy sugar coating the poisonous legislation while postponing the most onerous aspects of the law, but the public is not to be fooled, not even by Fool.

  • Report this Comment On February 25, 2014, at 4:46 PM, zapped70 wrote:

    Saying that we should keep part of this law is like saying a woman should allow an abusive lover to come over and massage her feet on occasion.

    Nothing about this "law" was a good idea. It is socialist and anti-American to the very core and so are those who continue to support it despite its numerous glaring flaws.

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Brian Orelli

Dr. Orelli is a Senior Biotech Specialist. He has written about biotech, pharmaceutical, and medical device companies for The Motley Fool since 2007.

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